super investor’s tips
Charlie Munger’s 10 Principles To Get High Investment Returns
- Measure risk & invest accordingly.
- Independent investing > group investing.
- Prepare, study, track & then pull the trigger.
- Intellectual humility.
- Be rigorous in your analysis of a stock.
- Allocate wisely.
- Patience – resist the natural human bias to act.
- Be decisive when the moment calls.
- Change when change is necessary.
- One word. Focus.
Benjamin Graham Check List
- An earnings-to-price yield of at least twice the AAA bond rate.
- P/E ratio less than 40% (over 5 years)
- Dividend yield of at least 2/3 the AAA bond yield.
- Price below 2/3 of tangible book value per share.
- Price below 2/3 of Net Current Asset Value.
- Total debt less than book value.
- Current ratio greater than 2.
- Total debt less than 2 times Net Current Asset Value.
- Earnings growth = at least a 7% annual compound rate.
- Stability of growth of earnings no more than 2 declines of 5% or more in earnings in the prior 10 years.
Warren Buffett: 8 Mistakes Every Investor Makes
- Not pulling the trigger on a stock.
- Dancing in & out of stocks.
- Buying cheap stocks of poor quality.
- Buying airline stocks.
- Buying great stocks on a small scale.
- Buying stocks high & selling low.
- Waiting for a market crash.
- Following the madness of crowds.
Ray Dalio: 6 Signs Of A Market Crash On Its Way
- Prices are high relative to traditional measures.
- Prices are discounting unsustainable conditions.
- New buyers have entered the market.
- There is broad bullish sentiment.
- Purchases are being financed by high leverage.
- Buyers/Businesses have extended forward purchases.
Charlie Munger: Advice On Investing
- When you see a sale, buy big!
- Look to the inefficient markets for stock opportunities.
- Think like a business owner.
- Don’t over complicate investing.
- Don’t be afraid to go back on your investment decisions.
- China offers some low price & high quality stocks.
Super Investor’s Tips Conclusion
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